Tata Motors – Unexpected Loss Reported-Q4

Tata Motors, one of the leading automobile companies of India, reported a surprise consolidated net loss of Rs 7,605 crore for the quarter ended March 31, 2021-Q4FY21. This is on account of asset write downs in subsidiary Jaguar Land Rover-JLR.

From Tata Motors Wesbite

The company has incurred cash write downs on assets worth Rs 9,606.1 crore over and above the restructuring costs of Rs 5,388.2 crore. In sum, the exceptional loss in Q4 related to JLR stood at nearly Rs 15,000 crore.

Tata Motors was expected to report a net profit of Rs 2,774.10 crore and revenue of Rs 87,517.8 crore for the fourth quarter. 

It reported a loss of Rs 9,894.2 crore in the corresponding period last year. The auto major’s revenue from operations stood at Rs 88,628 crore for the fourth quarter, up 42 per cent from the revenue of Rs 62,492 crore corresponding to the same quarter last year.

Tata Motors reported a net profit of Rs 1,646 crore as against a loss of Rs 4,871 crore in the year-ago period autonomously. 

For the full financial year 2020-21, the company reported a consolidated net loss of Rs 13,395 crore, against a net loss of Rs 11,975 crore in the previous year.

The India business reported a 106 per cent year-on-year jump in revenues to Rs 20,046 crore in the March quarter. 

Tata Motors’ global supply-related challenges have gone downhill, where coronavirus cases are still high in many markets.

According to the company, supply chain issues, specifically for semi-conductors, have become more difficult to mitigate and are now impacting production plans for Q1. The company is working closely with affected suppliers to resolve the issues and minimize the effect on customer.

Whilst the demand remains strong, the supply situation over the next few months is likely to be affected negatively. Again, Q1 FY22 is expected to be relatively weak due to this as well as rising commodity inflation and expect to improve gradually from the second quarter.

CEO and MD of Tata Motors, Guenter Butschek said that the CV business consistently posted sequential quarter on quarter growth on back of improved consumer sentiments, buoyancy in e-business, firming freight rates and higher infrastructure demand including road construction and mining. He added that they have successfully improved their operational and financial performance by reducing cost.

Tata Motors reported an operating profit or the earnings before interest, tax, depreciation and amortization (EBITDA) at Rs 12.7k crore.

Passenger Vehicle (PV) sales in Q4 stood at 79,600, up 191.6 per cent and the PV market share improved to 8.2 per cent during the FY21.

At the same time, PV EBITDA stood at 4.9 per cent and absolute EBITDA highest in the last 10 years.

Tata Motor’s scrip picked up 3.4 per cent to close at Rs 332 on NSE, on Tuesday.

Finvestor Social Media

Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

Leave a Reply

Your email address will not be published. Required fields are marked *